TY  - RPRT
        AU  - Carrillo, Paul
AU  - Donaldson, Dave
AU  - Pomeranz, Dina Deborah
AU  - Singhal, Monica
        TI  - Misallocation in Firm Production: A Nonparametric Analysis Using Procurement Lotteries
        PY  - 2026/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18612
        UR  - https://www.iza.org/publications/dp18612
        AB  - This paper develops new tools to study misallocation that do not require assumptions about the heterogeneity of firms’ technologies. We show how features of the distribution of marginal products can be identified from exogenous variation in firms’ input use and used both to test for misallocation and to quantify its resulting welfare losses. We apply this method to a setting with exogenous demand shocks from public procurement contracts for construction services in Ecuador. Our results reject the null of efficiency but our estimates of the resulting welfare losses from misallocation are small.
        KW  - procurement
KW  - misallocation
KW  - firms
        ER  -